Farm Bill ideas compared

Carl Zulauf, the Ohio State University economist who helped design the ACRE program in the 2008 Farm Bill, has put together a comparison of 10 of the top farm bill ideas, including those from farm and commodity groups and members of Congress.

Zulauf’s report was made for American Farmland Trust, which released the study Wednesday.

Amidst the Super Committee’s work to create a deficit reduction plan, many organizations have proposed alternatives to the current Title I farm safety net programs,” says Jon Scholl, American Farmland Trust (AFT). “The result has been an alphabet soup of 10 proposals. The details of any one program can create confusion even for those most versed in farm policy, so we commissioned a side by side analysis to help inform the farm bill debate.”

The proposals compared by Zulauf include revenue programs from the National Corn Growers Association’s ADAP (Agriculture Disaster Assistance Program), the American Soybean Association’s RMAF (Risk Management for America’s Farmers) and the National Cotton Council’s STAX (Stacked Income Protection Plan). It also summarizes programs offered by American Farm Bureau Federation, which eliminates SURE, keeps direct payments, and favors making budget cuts shared 30% each among farm, conservation and nutrition programs and 10% from crop insurance. And it describes a National Farmers Union proposal to re-establish a farmer owned reserve and a voluntary paid land set-aside.

Zulauf also weighs in on what makes good public policy. On the positive side, he found that Ninety-percent of the proposals would require the farms to experience a loss in order to receive government assistance, making “the farm safety net a risk management partnership between farms and the public.”

He was critical of proposals that take revenue or income protection down to the farm level.

“Economic justification for a farm safety net is systemic risk across many farms,” Zulauf said.” It does not justify public assistance for losses unique to an individual farm or a small number of farms.”

Zulauf also considered payment limits.

“Payment limits undermine the effectiveness of a risk management program because the size of the loss is only known after the risk has occurred, not before it has occurred,” he said. “Thus, a fixed, invariant payment limit can constrain the value of the program precisely when society may wish to provide the most assistance. If the decision is made to have payment limits, they should be flexible and adjust in some fashion with the size of the loss.”